Crude Oil futures just broke below their March 2020 lows and are plunging even after President Trump brokered a deal for OPEC to cut production. There’s a growing consensus that oil prices will be trading in the low single digits and some traders believe that “the new normal” for oil will be near $5/barrel. Here are three reasons why:
Economics 101: Supply & Demand
Economics 101 tells us that price is a function of supply and demand. Right now, supply is surging across the globe and demand is plunging. Eventually that will change and demand will increase but even when it does many people believe that it will not come close to absorbing the global supply glut.
